Online TV and video to 'take off'

17 October 2013

LONDON: Global online TV and video revenues over fixed broadband networks are expected to more than double to $35bn by 2018 and the over-the-top TV sector is said to be on the brink of a 'huge take off', new research has forecast.

The Online TV and Video Forecasts report from Digital TV Research (DTR) predicts that 520m homes in 40 countries will be watching online TV and video in 2018, up from 182m in 2010, and this will include both paid-for and ad-supported content.

The research company expects the over-the-top (OTT) TV sector to grow rapidly, driven by new technological advances and greater broadband penetration.

Another key driver will be the expansion of streaming services, such as Netflix and Hulu Plus, beyond their North American base.

Simon Murray, principal analyst at Digital TV Research, said: "The OTT TV sector is on the brink of a huge take-off as the key players expand internationally, broadband penetration increases, technology advances and as new partnerships are announced on a daily basis."

DTR predicts that rapid advertising expenditure growth will continue, reaching a global total of $16.4bn in 2018 from $7.4bn estimated for 2013.

But advertising's share of total OTT revenues will fall from 60.6% in 2010 to 46.9% in 2018 as more viewers sign up to subscription services or use rental/pay-per-view and download-to-own purchasing methods.

Subscription services will become the fastest growing paid-for OTT revenue stream with online TV and video subscription revenues expected to rise from $6bn in 2013 to $13bn in 2018.

Rental/pay-per-view revenues are forecast to grow to $2.1bn from $207m in 2010 and download-to-own will also see tenfold growth from $330m in 2010 to $3.5bn within the next five years.